SHFE Zinc Hovered at Highs, Awaiting Further Macro Guidance [SMM Zinc Morning Comment Dec 11]

Reports indicated that Israeli forces entered an area approximately 25 kilometers northwest of Damascus, the capital of Syria, which was denied by Israel; the Biden administration has been cooperating with the Trump team to achieve a Gaza ceasefire agreement before the latter takes office; South Korea's ruling party discussed the possibility of Yoon Suk-yeol resigning in February or March next year; the Reserve Bank of Australia kept the benchmark interest rate unchanged for the ninth consecutive time; Microsoft shareholders voted against a Bitcoin investment proposal; President Xi Jinping stated that China is fully confident in achieving this year's economic growth target; in the first 11 months of this year, China's total import and export value of goods increased by 4.9% YoY.

Overnight, LME zinc opened at $3,115.5/mt, fluctuated along the daily moving average after the opening, dipped to $3,101.5/mt during midday, then rebounded and climbed all the way up, reaching a high of $3,150.5/mt at the end of the session, and finally closed up at $3,149/mt, up $21/mt, or 0.67%. Trading volume decreased to 6,398 lots, and open interest decreased to 240,000 lots. Overnight, LME zinc recorded a bullish candlestick, with the upper Bollinger Band forming resistance. LME zinc inventory decreased by 1,075 mt to 277,050 mt, a decline of 0.39%. Previous favorable policies still provided support, but the strengthening US dollar index exerted pressure on zinc prices. Overall, LME zinc hovered at highs, with attention on the release of US inflation data today.

Overnight, the most-traded SHFE zinc 2501 contract opened at 25,800 yuan/mt, fluctuated rangebound along the daily moving average after the opening, dipped to 25,730 yuan/mt at the beginning of the session, then briefly surged to a high of 25,875 yuan/mt, and after a pullback, climbed again at the end of the session, finally closing up at 25,870 yuan/mt, up 95 yuan/mt, or 0.37%. Open interest decreased to 52,454 lots, while open interest increased by 2,163 lots to 137,000 lots. Overnight, the most-traded SHFE zinc contract recorded a bullish candlestick, with the 5-day moving average below providing support. Market optimism persisted, and zinc prices fluctuated at highs. However, with smelter production expected to increase in December, support from the supply side weakened, awaiting further macro guidance.